Blazing Their Own Trails

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Autodesk CFO Mark Hawkins counts himself very fortunate to have worked for two companies with robust and carefully structured training and development programs. Hewlett-Packard, for example, sent him twice to graduate school and rotated him through various roles, some of which were overseas. Later in his career, at Dell Inc., he continued with job rotations and further honed his leadership skills by participating in a highly selective program that brought in CEOs of other companies and top strategists like Ram Charan to deliver guest lectures.

Those experiences have inspired Hawkins, who joined Autodesk in the beginning of 2009, to press toward a lofty goal in his current position: "To give team members the best development experience they've ever had in their entire career."

But when it comes to cultivating his own 300-person finance staff, Hawkins is not attempting to duplicate the formal experiences he found so valuable.

Instead, believing that training programs are more about "looking for the natural opportunity" than investing heavily in structured approaches, Hawkins wants each person to draft his or her own development plan. Those individually tailored plans can include a variety of ad hoc internal programs he is experimenting with, such as letting aspiring managers work on employee engagement strategies, along with whatever training each staffer believes is most important for his or her development.

Many CFOs are taking a similarly pragmatic and varied approach, tailoring training to the individual rather than relying on standardized curricula. There are plenty of benefits to that, including relatively low fixed costs and a high degree of relevance to the business at hand. It also sits well with the younger generation of employees, who tend to believe that "customization is king."

High-potential employees seem to respond particularly well to "programs that reinforce the idea that a company wants to be a collaborative rather than a command-and-control organization," says David Mallon, an analyst with Bersin & Associates. That means that elements such as action learning projects, which give employees real business problems to solve, along with unfiltered chats with the CEO and CFO, are on the hot list, as are "content libraries" with self-directed online classes that employees can take whenever they can fit them into their schedules.

Customized programs that use real-world data and situations, in fact, can result in benefits that go far beyond better-trained employees. One consulting firm, BTS, estimates there is a return on investment of 10 to 12 times the cost of its programs when company-specific numbers, strategies, and situations are fed into simulations the firm creates. How so? "People who undergo that kind of training may go back to their jobs and see an opportunity to raise prices, reduce inventory, or otherwise put the experience to immediate use," says Rommin Adl, an executive vice president at BTS.

No CFO will have a problem with that kind of ROI, but that doesn't mean that customized training programs are a no-brainer, at least when it comes to tailoring them to specific employees. If training becomes all about what the employee deems important for his or her career development, with each one crafting a unique plan, how much structure does a company need to put around training in order to make sure the organization gets what it needs?

If a company's training and development programs take only the salad-bar approach, says David Smith, managing director at Accenture and co-author of Workforce of One (which explores the extent to which companies are customizing various initiatives to employee desires), "it won't really serve them best in the long-term." Adds Ken Johnson, general manager for corporate training firm 7city Learning: "There's not a lot of retention associated with taking an assortment of online classes."

Do-It-Yourself Development

Regardless of how they attack it, for many finance executives, training — particularly for the so-called high-potentials — is high on their list of concerns. A recent Mercer survey found that leadership succession, training, and development were the top talent-management priorities cited by more than 400 human-resources managers. (General workforce training came in much lower on the list.)

More tellingly, perhaps, a study by Grant Thornton found that a solid majority (77%) of CFOs say that soft skills like critical thinking, problem-solving, and negotiating ability are not only their top training challenge but also a key challenge to hiring.

The need for employees with true business intelligence — versus pure technical skills — is why many CFOs will argue that the optimal training structure will vary from one company to another, based on the industry, size of the company, and tenor of the team in question. Paul Dascoli, CFO of VF's jeanswear division, has had experience with a variety of development models during his career, including nine years at Pepsi, a company well known for its structured training programs.

At the beverage giant, "we were bringing in new people on a regular basis, and many were just beginning their finance careers, so a standardized approach that made sure they got core-competency training was the right one," says Dascoli. Now, at VF, his staff is more tenured, "so working on personal-development opportunities is perhaps a little more appropriate," he says.

A personalized approach also makes sense for many smaller companies, where the cost of creating a formal program could be prohibitive. Michael Lehman, former longtime CFO of Sun Microsystems and now CFO of start-up Palo Alto Networks, is well acquainted with the process of training a future generation of CFOs through classes, seminars, and job rotations. Some Sun alums who have jumped straight into corporate CFO roles elsewhere include Robyn Denholm, CFO of Juniper Networks; and Ronald Pasek, CFO of Altera.

Now, Lehman is trying to take the most effective pieces of Sun's formal programs and downsize them for a much smaller staff of around 25 people. His guiding principle, though, is that employee training "has to be totally self-motivated. I place a big burden on individuals to determine what their skill sets are and what they want to do differently," Lehman says.

Once an employee takes an inventory of his or her skills and goals, Lehman invites the employee to talk to him personally about development options. One staff member might be asked to take on a systems migration project to help broaden his or her perspective, for example, while transferring some of that person's existing duties to another staff member who could benefit similarly. For another, it could entail an opportunity to work with Lehman on finding new office space and negotiating the lease. Lehman also encourages each person to find between 24 and 32 hours' worth of outside training, be it online or classroom-based, to enhance his or her skills. "What I say to folks is, 'I can help you reach your potential, but you have to decide where you want to go,'" he says.

The Academy Approach

On the flip side, there is still a place for highly structured programs in some companies. David McHale, the executive vice president and CFO of Northeast Utilities, recognized years ago that the energy industry was undergoing huge fundamental changes, just as a large portion of the workforce was expected to retire. His solution? Build a curriculum to supercharge development for the next generation of leaders. Launched in 2008 in partnership with the University of Connecticut's business school, NU's "finance academy" is a two-and-a-half-year program through which 90 employees split into three classes progress together. The classes take place on the university's Hartford campus one afternoon a week during work hours.

"We have a full curriculum designed to build a utility executive [that covers] what you would normally learn in 10 to 15 years," says McHale. The classes are highly relevant to the business: elements include a simulation in which employees must make a case for why they need a rate hike to "regulators" played by McHale and other company executives, and one in which employees try to sell bonds or equities to "institutional investors," played by McHale, along with NU's investor-relations director and treasurer.

McHale also uses the program to stimulate longtime finance staffers, by asking them to teach classes (and undergo training for that task ahead of time). "It delivers benefits both ways," McHale says. "I've seen improvement in communication skills at both the director/teacher and the employee/student level."

Far from feeling "controlled," employees say they liked the standardized aspect of the program. Heather Arvanitis, a staff accountant, applied for the academy right after finishing a part-time MBA program in which she had many classes to choose from each semester. "Going through as a group with everyone doing the same thing is super-important, because it helps you really build those relationships with people across the company," she says. That's worked well for her — she just accepted a new position in the rate and regulatory services division of the company, a job she says she wouldn't have even considered (or been considered for) without the training program. And others enjoyed the networking aspect so much that they are clamoring for a postgraduation follow-up course, says McHale, a project he's working on now.

The academy approach is catching on at larger companies, says Accenture's Smith, albeit often in a more virtual sense. Many companies are defining a core body of knowledge they want each employee to absorb, and offering 70% of the training through, say, online libraries, with another 30% coming from outside classes or seminars. "It's an efficient and effective way to use resources, but without it feeling rote," since some of the offerings can be customized, Smith says. He expects smaller companies to follow suit, possibly leveraging consortiums to make the structures more cost-effective.

Working with What You Have

One common theme among all companies is that CFOs are finding ways to use regularly scheduled finance work as reinforcements for short-term training programs or events. Autodesk's Hawkins, for example, has asked the leaders of each department within finance and IT to give operating reviews of their function — including staffing, major initiatives, longer-term goals, and performance highlights and frustrations — twice a year. Then, he invites his staff to attend any or all of them. That turns an otherwise ordinary exercise into a triple win. "The presenters get visibility with my entire staff, I get the info, and my leadership team gets a way to learn vicariously and break down some of the silos among the departments," he says. "I joke with the team: 'You can't buy this at business school.'"

Similarly, Tiffany & Co. holds quarterly meetings to go over earnings with employees who have previously completed a business-simulation exercise, to reiterate some of the concepts from that training. The simulation itself, run once or twice a year with help from BTS, introduces people to such concepts as the trade-offs inherent in the annual business-planning process, and the need to consider the returns of various investments. But "if that training were a one-time event, most people would end up forgetting the majority of it over time," says Pat McGuiness, Tiffany's senior vice president of finance, since few (even within finance) work with those concepts every day.

So Tiffany's finance leaders and BTS augment that training by explaining the business strategy behind various numbers in the 10-Q. "If you're going to do something quarterly, you need to leverage what's already there, or it won't be very cost-effective," McGuiness says. In addition to covering key elements from the quarterly financial results, they might highlight why the company decided to make certain investments and pull back on others, or analyze the current competitive landscape in the luxury-goods market. Hundreds of employees, even those who haven't previously attended the simulation training, join the Webcast each quarter, McGuiness says, which entails little additional cost.

Ultimately, finance chiefs are likely to find the best success with a blend of structure and flexibility. But more important than the mix may be the explicit endorsement of the very idea of training. Not only should CFOs encourage their staffs to expand their knowledge bases, but they should also lead by example.

That's why, in part, Autodesk's Hawkins recently completed a three-day Directors' College course at Stanford Law School for board members (he is on the board of BMC Software). Besides helping Hawkins professionally, the venture makes it easier to convince his staff to find the time to enhance their own learning: "I tell them, 'If I can go, you can go.'"

While the training budget is typically one of the first to face the ax when times get tough, officials at schools that offer custom executive-education programs say companies have continued to show strong interest in such offerings over the past two years.

Stephen Burnett, associate dean of education at Northwestern University, says that although open-enrollment executive-education programs saw a plunge in enrollment in 2009, the 75 or so custom programs that the school has tailored for individual companies have held up "fairly well" throughout the recession. Burnett says companies continue to invest in these programs because the focus is on equipping high-level executives to become more efficient or more effective in a specific area. That leaves even floundering companies "hard-pressed to stop offering them," he says.

Indeed, companies "are looking for concrete results," says Elaine Eisenman, dean of Babson Executive Education, which has seen a similar trend. "The era of education for education's sake has ended; now companies are saying, 'We want to educate people, but we also want to see a significant ROI.'"

Such customized programs tend to be used only by the largest companies, even though a recent analysis by corporate-learning research firm Bersin & Associates suggests they can be more cost-effective than open-enrollment programs when as few as 10 executives from the same company attend.

Not surprisingly, the format of these programs is changing. "Not only because of the financial crisis, but also due to time and travel constraints, organizations are asking us to do more blended solutions," that combine a limited amount of time in the classroom with online and Webcast-style modules, says Beth Stoops, senior vice president of corporate learning at Thunderbird School of Global Management. "The face-to-face programs are not enough anymore."

The schools may have more to learn in this regard, though. A recent Bersin survey found that 83% of companies rated "partnering to understand business needs" as "very important," yet only 27% rated business schools as being "very effective" at it, and blended learning solutions were particularly low-rated. — Leah Tedesco

In studying more than 400 companies, Bersin found that these five practices have the biggest impact:

• Leaders are willing to hear the truth, including bad news.

• Employees at all levels of the company are encouraged to ask questions.

• Decision-making processes are spelled out clearly across the company.

• Employees are encouraged to stretch by being given tasks beyond their current skill levels or responsibilities.

• Employees have some input regarding which job tasks they are assigned.

The good news is that these keys to creating a more effective "learning culture" have little to do with how much money companies spend on training and development. The rub, however, is that these practices extend well outside human-resources and training departments and require the commitment of leaders and managers; they also require companies to frame "learning" as something that goes far beyond "training." — Scott Leibs